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The effect of a longer eligibility to a labour market programme for dismissed workers

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Reprint Series
Adriano Paggiaro,
Enrico Rettore,
Ugo Trivellato

Liste di Mobilità is an Italian programme targeted to dismissed workers. It combines a ‘passive’ and an ‘active’ component. Eligibility duration varies with the worker’s age at dismissal. Using a new panel data set, we identify the impact of extending the duration of eligibility on re-employment probabilities and wages, via Regression Discontinuity Design. We validate the design by a set of overidentification tests. For most subgroups we find no significant impact, with a peculiar pattern for women entitled to monetary benefits. A major negative impact emerges for workers aged 50 or more granted monetary benefits, likely due to the fact that they can use the programme as a bridge to retirement.

JEL classification: 
C31, J38, J65, J68
December, 2009